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Factbox: Latest Obamacare repeal bill would block grant money to states, gut Medicaid
September 19, 2017 / 9:39 PM / a month ago

Factbox: Latest Obamacare repeal bill would block grant money to states, gut Medicaid

Activists participate in a rally to protect the Affordable Care Act outside the U.S. Capitol in Washington, U.S., September 19, 2017. REUTERS/Aaron P. Bernstein

(Reuters) - U.S. Senate Republicans are making one last attempt to overhaul Obamacare before a special parliamentary procedure allowing the bill to pass with a simple majority expires at the end of this month.

The latest proposal, called the Graham-Cassidy bill and sponsored by Republican Senators Lindsey Graham, Bill Cassidy, Dean Heller and Ron Johnson, would give states money in the form of block grants, allowing them to design their own healthcare systems while maintaining some regulations of the Affordable Care Act, former Democratic President Barack Obama’s signature domestic policy achievement.

The federal funding would run out by 2027, and after that would need to be reauthorized.

The bill gained momentum this week as Republicans aim to deliver on a seven-year campaign promise and one of President Donald Trump’s top campaign pledges. The bill’s sponsors say they are close to the 50 votes needed for passage, with Vice President Mike Pence casting the tie-breaking vote if necessary.

Here are some of the main provisions of the proposal:

INDIVIDUAL AND EMPLOYER MANDATES

Like previous repeal bills, the Graham-Cassidy proposal retroactively repeals the so-called individual mandate, the requirement that everyone purchase health insurance or else pay a fine. It also retroactively repeals the mandate that certain employers provide health insurance for their workers.

Health policy experts say the individual mandate is needed to induce young, healthy people who may otherwise forgo coverage to buy insurance and offset the costs of sicker, more expensive patients.

MEDICAID

The bill’s authors say states could maintain Obamacare’s expansion of Medicaid, the government health insurance program for the poor and disabled, if they choose to. But the legislation repeals enhanced federal funding for the expansion beginning in 2020. It then limits Medicaid spending beginning in 2020 by implementing a per capita cap.

The proposal aims to distribute equal funding to states for Medicaid by providing block grants based on the number of enrollees in each state. The block grants, coupled with the repeal of the Medicaid expansion, would slash funding to the 31 states that expanded the government program while states that did not expand would see a short-term boost in federal funding.

States would also be allowed to introduce Medicaid work requirements for many eligible adults to receive benefits, a fundamental change to the government program.

OBAMACARE PROTECTIONS

The bill maintains the Obamacare rule that children be allowed to stay on their parents’ health insurance until age 26, one of the law’s most popular provisions and one that is favored by Trump.

But the legislation allows states to opt out of the requirement that insurers charge sick and healthy people the same rates. States would be able to set up high-risk pools for expensive patients to purchase coverage, while healthier individuals would be able to purchase cheaper bare-bones health plans.

It would also enable states to waive the Obamacare requirement that all insurers cover 10 essential health benefits, such as maternity and newborn care, prescription drugs, and mental health and addiction treatment.

TAXES, TAX CREDITS

The proposal repeals some Obamacare taxes that are supposed to help pay for the law in the future, including the so-called Cadillac tax on high-cost employer-sponsored insurance and a tax on medical device manufacturers. It repeals fewer taxes than most previous repeal efforts.

The bill would also in 2020 repeal income-based tax credits that help low-income people purchase health insurance.

PLANNED PARENTHOOD

The bill defunds Planned Parenthood, the women’s health organization that conservatives oppose due to its abortion and birth control services, for one year.

Reporting by Yasmeen Abutaleb; Editing by Michele Gershberg and Leslie Adler

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